The Disruptive Effects of COVID-19 Pandemic on the Dynamics of EU Macroeconomic Indicators and on Essential Supply Chains

Abstract

As evidence shows, in the early stages of the pandemic, medical services were overwhelmed by the large number of COVID-19 cases that far exceeded both initial predictions and logistic capacity. To decelerate and contain the spread of the virus, the European Union, like all other great economic powers, attempted to provide a symmetrical response. Thus, curfew measures were imposed in order to restrict mobility and isolate the population from the COVID-19 hotspots. These measures could be associated to widespread contagion effects in the economy, a deterioration of the public finances and a distortion of many supply chains, some of them critical for the EU. The main aim of this paper is to provide a more objective and comprehensive picture of how the European Union economic landscape has been affected by the coronavirus pandemic. In this regard, the author analyses, using some of the most relevant databases, the manner in which the COVID-19 pandemic has influenced, at a macroeconomic level, the dynamics of production, public spending, private investment, consumption and intra- and extra-EU trade. Further, the second aim was to analyse the directions proposed by the European Union for the post-pandemic economic recovery. Finally, the author underlines the need to focus more on the security of supply for essential materials in dealing with future crises, such as climate change. The research is mainly phenomenological in nature and, with the help of the positivist dimension, the author captured the most representative and useful correlations and causal relationships resulting from the analytical approach used in this paper.